What to Watch for in Tuesday’s Jobs Report

The most jarring element of the delayed September jobs report, due out Tuesday, may be the fact that it isn’t coming on a Friday. Job growth was likely steady but unremarkable in the month heading into the government shutdown. Economists expect little change in the nation’s unemployment rate as the economy closed out the third quarter.

Bloomberg News

The 16-day shutdown shuttered most of the Labor Department’s Bureau of Labor Statistics, which produces the monthly snapshot, just days before the originally scheduled Oct. 4 release date. That means its team had already collected data for the September report but needed to put the finishing touches on the analysis. As a result, the September report could be the last clean gauge of the job market before most short-term effects — or longer-run damage — from the budget battles hit U.S. employers and households.

Visit WSJ.com on Tuesday at 8:30 a.m. Eastern for live analysis of the jobs report.

The consensus forecast among economists, based on a Dow Jones Newswires survey, puts the unemployment rate unchanged at 7.3% in September and the payroll gain at 180,000 jobs for the month. That would be a slight (but insignificant) increase from the 169,000 jobs added in August and pretty close to the gains of the past year. The revisions could be as important as the headline figure for September. The latest figures show a gain of just 104,000 jobs in July. Downward revisions to prior months, along with a weaker-than-expected reading for September, could fuel speculation about whether businesses were growing more cautious due to interest-rate volatility, talk of war in Syria (remember that?) or the approaching Washington dysfunction.

For the numbers geeks among us, the team at CRT Capital Group offers this trivia: The first snapshot of September payrolls has a statistical tendency to come in lower than expected 69% of the time, with an average miss of 89,000 jobs off the consensus. For the other 31% of the time it comes in higher than expected, the average upward surprise is 54,000 jobs.

Unless the jobs report shows an extreme surprise in either direction, this isn’t a jobs report that will move the needle for the Federal Reserve’s decision at its Oct. 29-30 meeting. Officials have already signaled that the shutdown has muddied economic data too much for a data-dependent central bank to make any immediate decisions.

But Fed officials will be watching closely to assess the labor market’s development and decide whether to hint at a potential change in policy before the year is out. The latest Wall Street Journal survey of economists, conducted in the early days of the shutdown, showed most forecasters betting on a December or January reduction in the Fed’s $85 billion bond-buying program. Some traders and economists, however, already are pushing their expectations down to March.

Does ‘Jobs Tuesday’ Sound Unnatural? Yes.

The longest U.S. government shutdown on record, covering a three-week stretch from December 1995 to January 1996, delayed the jobs report by a couple of weeks. But the Labor Department still released it on a Friday: January 19, 1996. Even if the September employment data proves to be forgettable, a generation of economics reporters will never forget their first — and only, we hope — Jobs Tuesday.

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